Demand will be more elastic. If a product or service can easily be replaced by another cheaper option, the price elasticity of demand is very high. The simple answer is that it depends. the size of the price elasticity of demand depends on what factors ? This indicates that the price elasticity of demand for the dolls is: 2.5 .4 .5 5.0 A. Thus the availability of close substitute implies a high price elasticity of demand. If the demand of the product is elastic then the fall in price will increase demand … The demand for a good or service depends on multiple factors such as price, income, and preference. 34) 35)On a linear demand curve that intersects both axes, A)the elasticity decreases as the price … B)a price elasticity of demand that is different at all prices. However, if consumers depend on the consumer good, the price elasticity is … explain how the number and availability of subs influences elasticity a 20% increase in price might only lead to a 5% contraction in demand. Ped<1), then most of the tax can be passed on. These examples show that price elasticity primarily depends on whether and how many substitute goods are available. When prices go up by 10%, the quantity demanded decreases by more than 10%. Factor # 2. Four types of elasticity. If the price of Pepsi Cola increases from 40 cents to 50 cents per bottle and the quantity decreases from 100 bottles to 50 bottles, then the price elasticity of demand for Pepsi Cola is Whenever there is a change in any of these variables it causes a change in the quantity demanded of the good or service. It depends on the price elasticity of demand for the products. A good's price elasticity of demand depends in part on how necessary it is relative to other goods. Price Elasticity of Demand (PED) Price elasticities of demand are always negative since price and quantity demanded always move in opposite directions (on the demand curve). This is because consumers are less sensitive to price changes, e.g. This depends on the coefficient of price elasticity of demand. A good's price elasticity of demand depends in part on how necessary it is relative to other goods. (5) - if there are many subs available, consumers can easily switch away if the firm increases its price. C)unit price elasticity of demand at all prices. The response is 25% to a change of 10%, so 25/10=2.5. A heart valve for heart attack victims 1. If the following goods are priced approximately the same, which one has the least elastic demand? Therefore, the elasticity of demand between these two points is [latex]\frac { 6.9\% }{ -15.4\% }[/latex] which is 0.45, an amount smaller than one, showing that the demand is inelastic in this interval. A)zero price elasticity of demand at all prices. Definition of the Commodity: The numerical value of the coefficient of price elasticity also depends on how narrowly or broadly a commodity is defined. That means the quantity demanded is very responsive to price changes. The use of machines may reduce the cost of production and price. When demand is inelastic (i.e. Thus consumers are unlikely to be very much responsive to price. D)infinite price elasticity of demand. Elastic demand, i.e, when the absolute value of elasticity is more than 1. The equity versus debt decision relies on a large number of factors such as the current economic climate, the business' existing capital structure, … If the following goods are priced approximately the same, which one has the least elastic demand?